See no hurdle in passage of retail FDI: AK Bhattacharya

The government is confident of winning the vote on FDI in both the Houses. All eyes will be on the Samajwadi Party (SP) and the Bahujan Samaj Party (BSP), the Uttar Pradesh (UP) parties that have kept the UPA guessing so far.

The real test for the government will be in the Rajya Sabha where any one of the two UP parties will have to vote with the government, to defeat any motion against FDI in multi-brand retail. AK Bhattacharya, editor, Business Standard does not foresee any problem in the resolution being carried forward. Once the bill goes through this political process, it will reassure foreign investors that it would be unlikely for it to get tweaked or reversed, he added. Below is his edited interview on CNBC-TV18. Q: Are you expecting to see this vote on retail FDI go through in the Rajya Sabha as well? What is the sense you are getting? A: I do not foresee any problem in the resolution being carried through because government seems to have sewn up its numbers. Also, if one looks at the way Samajwadi Party (SP) and Bahujan Samaj Party (BSP) strengths play out in both the houses; the government will just depend on the extension of one of these parties and it will be through. So, the debate is not likely to cause much of a problem for the government. The larger point that many commentators have pointed out is that once it goes through this political process, perhaps the foreign investors will be more reassured that this is a step that is not likely be tweaked or reversed, like they had feared earlier. There will be greater stability, greater sense of comfort once it goes through. And perhaps some indication that more economic reforms like the Pension Bill, the Insurance Bill might also get the nod of parliament. In spite of many problems that one had seen in the last few weeks and last two days, debates etc, perhaps at the end of the day this augers well for the economy. Q: Once the voting is through tomorrow, do you expect business transactions to be smooth in the parliament till the end of the session? Do you also expect these economic bills which you were pointing to whether it has been Pension, Insurance or the Banking Amendment Bill to actually go through? A: I personally believe the government that does not have full majority on its own, has to depend on its coalition partners, and parties that are supporting it from outside. There also has to be some give and take. My understanding is that the government may concede some points on Insurance Bill, which will in a sense impact the Pension Bill because the contentious issue of FDI limit being raised for insurance sector from 26-49 percent is still a bone of contention for BJP. It is possible that the government agrees to amend that specific clause in return with the passage of other changes that the government’s Insurance Bill proposes. So, it will be a give and take. I do not see much of the problem with the other bills particularly the Competition Commission Bill, the Forward Contracts Regulation Bill and even the Companies Bill when they come forward.  I do see some movement on all of these legislative reforms. Q: One understands that when you do the calculation even if SP and BSP were to abstain it may not be adequate. Over there, even if the SP abstains, the may require BSP to vote in favour of the bill to get the majority. There is that calculation doing the rounds. So you would not give even a one percent probability of the vote not going through? A: Nothing is certain in politics till it is actually done. Our calculations show that if one of these two parties, the BSP or SP if they simply abstain, given the current composition of parliament in Lok Sabha and Rajya Sabha, the government will scrape through. This is our understanding but one does not know because in politics even a few hours is a long-long time. It is possible that the parties may take position because I do not think the government members on the floor of Lok Sabha yesterday, displayed certain cockiness which may not have been appreciated well by those whose support or extension is crucial for the passage of the bill. I think it is a fluid situation; discussions are still taking place outside parliament. As of now from numbers’ side and passage side it seems it is going to be smooth sailing for the government.